- USDJPY 117.75 (USD 200m) 118.00 (USD 200m) 118.40 (USD 450m) 119.00 (USD 240m)
- EURUSD 1.1300 (EUR 545m) 1.1400 (EUR 849m)
- GBPUSD 1.5175 (GBP200m)
- AUDUSD 0.8025 (AUD 398m)
- NZDUSD 0.7650 (NZDUSD 598m)
For more on how to use this info read here’s a link
Comments from Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, from an interview with Tages-Anzeiger, a Swiss German-language national daily newspaper published in Zurich
- Says ECB bond buys were seen as big risk
- Says still prepared to intervene in FX market
- Says FX market hasn’t stabilized yet
- Now sees no need for more property market measures
- Expected negative inflation to be temporary
Headlines on Bloomberg
Also, more at Reuters
Forex news for Asia trading Tuesday 27 January 2015
Some less than good data from Australia and China today (see bullets, above) didn’t hold the Australian back. After a sideways move it began to tick higher in mid-afternoon (Sydney time) and is near session highs as I write. The range has not been larger, but nevertheless a reasonable performance for the AUD today. NZD/USD is on its highs too as I write. Going into Europe, though, both are not too far from resistance areas.
EUR/USD tracked sideways after giving up a little ground late in the US afternoon. Cable, on the other hand is not far from session highs, just under 1.51.
Oil and gold were both relatively subdued.
The yen was active, with USD/JPY trading higher in the Tokyo morning, only to fall away after comments from Amari and Itoh (see bullets, above).
Here’s a quick read on why Greece won’t be leaving the Euro any time soon:
- Intertwined relationship between the European countries has obviously created huge economic problems for the peripheral countries in particular
- And it has largely benefited Germany
- Being the dominant banking system in the region Germany also had the most to lose if the Euro collapsed
- In addition to widespread defaults, defections would result in collapsing competitiveness for the Germany currency relative to everyone who leaves
More (worth a read), here
Nomura says the probability that Prime Minister Shinzo Abe’s economic policies will end badly is increasing
Toshihiro Uomoto, Nomura chief credit strategist, says:
- “Signs are mounting that Japan’s fiscal sustainability is beginning to crumble”
- Uomoto said Jan 26 by phone that the drop in oil prices makes tapering by the BOJ more unlikely
- Uomoto’s most grim scenario for Japan is his least probable among three mid-term views through 2017, with the two others more optimistic of Abe’s ability to raise taxes by that year
- Abe’s government will probably do all it can to boost the economy before national elections in 2016, as he seeks to garner support for changing the nation’s pacifist constitution
More at the article: Nomura says odds up of Abenomics derailing as tax pledge doubted
Via Bloomberg, “according to UBS Group AG”:
- Asia’s wealthy are falling out of love with the Aussie dollar
- Record-low yields and sustained declines persuade them to look elsewhere (10-year yield is 74 basis points above that of the U.S., down from 130 a year ago)
- Many of the bank’s wealthiest clients in the region began to abandon the currency as Australia’s bond yield premium over the U.S. slid and the Federal Reserve discussed raising interest rates, said Simon Smiles, Zurich-based chief investment officer for ultra-high-net-worth individuals.
- “Two years ago when I came to the region, in most client meetings, people were asking about Aussie assets, the Australian dollar, yield play; when you talk about it now, there’s almost no interest,” Smiles said in an interview on Monday. “From the third quarter of last year, there’s a growing belief that the U.S. dollar would start a sustained appreciation trend.”
Not sure if this rings the bell for the Aussie low yet …
This year’s results are in, but there’s another 2 coming up – one for male contestants, one for females.
The contestants are only labelled with numbers, not names … but still … well worth a look.
On the results of the males pageant:
- “Personally, I don’t think Six is that handsome, but we happened to use a very photogenic picture of him for the poster,” Ms. Bito said. The photo makes him look a little more attractive than he is, especially around the eyes, she said.
Check it out!
What do you think, should number 6 have won?
New Zealand PM Key:
- NZ government to deliver further steady reforms this year
- A lot of international interest in the New Zealand economic story
- Renewed confidence in economy
- Interest rates look set to stay low for longer
- Government is concerned about Auckland house price inflation
- Governmentis still aiming for a budget surplus this year
Comments at a news conference, on the Bloomberg
Tokyo University professor Motoshige Itoh is one of the private members on Japan’s Council on Economic and Fiscal Policy:
- “I think the yen is just very low now. Not because of just intentional policy for managing, manipulating the exchange rate, but because of just very strong anti-deflation policies.”
- ‘So eventually I think the yen will appreciate to a more normal level. But the question is when.’’
- Bank of Japan Governor Haruhiko Kuroda must be very careful about any additional monetary easing
- Says there will probably be ‘‘more creative discussion about monetary policy from now on in Japan”
Itoh interviewed on Bloomberg TV
A UBS research note asks … What’s behind more volatile markets?
Volatility is back
- There are reasons to expect that this is only just the beginning
- Volatility spikes are likely to recur
From a top-down perspective several factors are contributing to higher volatility:
- The first is monetary policy divergence
- The second is the disruptive end to the commodity super-cycle
Monetary policy divergence is likely to increase market volatility:
- Changes in Fed policy are often the source of significant moves across capital markets … the Fed’s policy decisions impact the anchor of all valuations, the risk-free rate. Uncertainty about the path of the risk-free rate is transmitted via changes in liquidity, credit and term premiums across the universe of fixed income assets, and via changes in discount rates to the present value of future cash flows (i.e. to equity valuations)
- Under ‘QE’ and even during the ‘taper’, Fed communication and policy actions were predictable in ways not possible once rate normalisation commences
- The Fed’s next steps will be data-dependent and the incoming data will be predictably un-predictable
- The Fed is now going out on its own
- ECB embarking on a ‘QE’ program
- Bank of Japan may have to ease again
- Some emerging central banks, including in China, India or Turkey, are or will be easing
The second big shift in asset price volatility stems from the end of the super-cycle in commodity market:
- Over the past decade rising demand (above all from China) and sky-rocketing commodity prices induced significant new investment in commodity production, including in energy and basic materials. As fresh supply comes onto the market, prices are returning to familiar long-term trends
- The restoration of supply/demand equilibrium is not instantaneous, nor smooth … excess investment by marginal producers, the actions of large market participants, the unwinding of excessive expectations and the impacts of leverage can all make for big dislocations as markets adjust
- No reason to believe that those sources of volatility have run their course
And … other sources of potential market swings:
- Political and geopolitical uncertainties
- Fragile, uneven global recovery will offer many opportunities for investor sentiment to gyrate between optimism and pessimism in 2015 (and beyond)
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